DNA Exclusive! Maran letter puts PM in the 2G spectrum

In 2006, Prime Minister Manmohan Singh approved, in principle, a Group of Ministers to look into the release of additional spectrum and pricing of the scarce 2G spectrum. That changed after he met then telecom minister Dayanidhi Maran on February 1, 2006. 

 

Maran’s letter (Click here for the letter) asked the PM to dilute the terms of reference and ensure that the issue of pricing of spectrum would remain with the telecom ministry.

 

Did Manmohan Singh play a role in diluting the terms of reference of the Group of Ministers, leading to the loss of Rs1.76 lakh crore in the allocation of 2G spectrum in January 2008?

 

Documents obtained under the Right to Information Act by advocate and RTI activist Vivek Garg and made available to DNA show that the prime minister was part of the decision that ensured that the pricing of 2G spectrum would be the telecom ministry’s preserve.

 

The decision helped telecom minister A Raja to manipulate the pricing of spectrum, leading to India’s biggest scam.

 

In January 2006, Singh had approved, in principle, a GoM to look into the release of additional spectrum from the defence ministry for private telecom players. The group’s terms of reference were quite exhaustive and included the issue of pricing of scarce 2G spectrum.

 

The GoM was to submit its recommendations by the last week of June 2006, following which the government would decide a policy and price for selling the spectrum. But all that changed after Singh met the then telecom minister Dayanidhi Maran on February 1.

 

A letter written by Maran, a copy of which is available with DNA, urged the PM to dilute the terms of reference and ensure that the issue of pricing would not be with the GoM. The demi-official letter dated February 28, 2006, (DO No L-14047/01/06-NTG) and marked ‘secret’ is a critical document in the 2G scam.

 

Maran asked the PM to ‘kindly recall’ their meeting on February 1 when they had ‘discussed the issue of the GoM relating to the vacation of spectrum by the defence.’

 

He said: ‘You had kindly assured me that the terms of reference of the GoM would be drawn up exactly the way we wanted, which was to focus only on the issue of vacation of spectrum.’

 

A closer reading of the letter shows Maran’s objection to the inclusion of spectrum price in the mandate of the GoM. ‘I am, however, surprised to note that the GoM as constituted has much wider Terms of Reference,’ some of which, he argued, ‘impinge upon the work normally carried out by the ministry.’ Meaning the GoM should look at a diluted agenda and not consider the pricing issue.

 

Maran went a step further and urged the PM to ‘modify the Terms of Reference as suggested by us, which are enclosed.’ While the original terms of reference, a copy of which is available with DNA, had listed six issues, including pricing of spectrum, Maran sent across five points, all of them dealing with the defence ministry vacating additional spectrum. Once it was vacated, he would be the sole arbiter of the price at which the spectrum would be allocated.

 

What did the PM do? He just sent across a bland letter to Maran acknowledging receipt of his letter seeking critical dilution of the GoM’s mandate.

 

Subsequently, the GoM’s mandate was diluted and it looked only at the release of spectrum by the defence ministry. On December 7, 2006, the cabinet secretariat issued the revised terms of reference, deleting the issue of spectrum pricing.

 

The PM’s tacit nod to a crucial coalition partner’s demand set the stage for Raja when he took over as telecom minister from his party colleague Maran. When the allocation of spectrum licences began, Raja used the PM’s nod to ensure that he would decide the price and give it out at a measly Rs1,600 crore on a first-come-first-served basis, causing a loss estimated at Rs1.76 lakh crore.

 

In going along with Maran’s demand, the PM also ignored a rule that has governed the functioning of government since 1961. The Transaction of Business Rules 1961 clearly prescribes ‘mandatory consultation with the ministry of finance as a pre-condition in respect of all issues which have financial implications.’ So, the allocation of spectrum had a clear mandate for consultation with the finance ministry headed then by P Chidambaram.

 

The note ‘seen by’ current finance minister Pranab Mukherjee has already established beyond doubt that Chidambaram failed to act. But now, it seems, the PM also helped to dilute the GoM that allowed Raja to step in and make a killing.

 

The PM had told a group of editors earlier this year that many of the decisions taken by his government flowed from ‘coalition dharma.’

 

Ideally, a source told DNA, the PM should also have been questioned by the CBI investigating the 2G scam. But with Singh holding charge of the CBI, would the agency have taken on its boss?